Spring is the beginning of the home-buying season. The months of March, April and May typically make up 30 percent of home transactions annually. Things are a bit different here in 2013. Inventory is at record lows, home prices are rising, and the number of foreclosures across the U.S. has subsided.
Americans are also feeling more confident in the real estate market. According to a poll on CNBC, 79 percent of Americans believe owning a home is an essential part of the American Dream. Also, 69 percent say it is better to own than rent. Most inspiring was that 1 in 3 Americans believed that Real Estate was a better investment than stocks.
With these new wrinkles in the real estate landscape, here are 3 things you need to know about the market before you search to buy a home:
Tightening Inventory
Thanks to a combination of an already low supply of existing homes for sale, and a slowdown in new residential construction, the result is inventory at record lows. And with 10 million homeowners still underwater from their mortgages, many potential sellers are holding off until home prices rise to healthier levels. What does this mean for home buyers this Spring? Be patient and plan to have their desired home criteria identified prior to beginning their home search. It’s not uncommon for new properties to sell the first day they’re on the market.
Increased Competition
In addition to the shrinking supply of homes, the number of buyers has increased, including more first-time home buyers, as well as real estate investors. What does this increased competition mean for you? It means that you must be prepared to act quickly as soon as you find a home that interests you. Hiring a professional who is well networked into your neighborhood is crucial in finding the dream home you seek. At Lee Davies Real Estate, you have a team of experts and specialists who work around the clock to find the home of your dreams.
Cash is King, but Pre-Approved Buyers Can Compete
Sellers often have more incentive to accept offers from all-cash buyers. “Cash will likely prevail if there are multiple bids because, from a seller’s view, they want a sale with fewer hiccups,” says Lawrence Yun, Chief Economist and Senior Vice President of Research at the NATIONAL ASSOCIATION OF REALTORS. Lenders, however, are making it easier to get approved. Brian Page at NW Mortgage says lenders are reducing credit standards, allowing higher loan-to-value ratios than in the past. As a result, the new mortgage regulations could translate to lighter restrictions on lending.
